Dodd's Financial Plan
I'll confess to a bias: I mistrust any bank regulation plan that emerges from the Senate, that plush haven of special interests. I especially mistrust anything that emerges from the office of Chris Dodd, not exactly Mr. Ethics.
That said: I'm reserving judgment until I have done what counts in the blog world as my due diligence. And I'm biased in favor of the basic principle of the plan: the lodging of new regulatory powers somewhere other than the Federal Reserve.
The most fascinating thing to watch in the debate to come will be which party lines up with which interest groups. Democrats have historically carried water for the big investment banks and hedge funds of New York. As commercial banking has shifted out of New York, Republicans by contrast have enlisted to serve credit card issuers and mortgage lenders. Democrats can accept stricter consumer protection because their donors depend less on retail banking; Republicans resist because its their interest groups that collect 24% interest rates and $3.95 ATM fees from hard-pressed or ignorant borrowers.
Is there any kind of larger public interest here? If so, it will find few champions. As a friend of mine who works on Capitol Hill grimly jokes: "Congress exists to arbitrate disputes between the merely affluent and the genuinely wealthy."